Oil prices in the United States collapsed to below zero for the first time in history as the deepening economic crisis resulting from the coronavirus pandemic placed traders avoiding delivery of crude oil and suppliers seeking to get rid of unwanted supplies of oil.
US oil prices fell into negative territory on Monday evening, at one point even touching a low point of minus $37.63.
This spectacular collapse resulted as demand from countries around the world decreased to a decades low while producers ran out of places to store excess crude oil.
Crude explorers in the United States shut down 13% of the drilling in the country last week. Saudi Arabia, Russia and other producers tried to push up prices last week by slashing production by just under 10 million barrels a day in May and June, the biggest cut ever negotiated, yet that was not enough to make up for the glut caused by the very current low demand for energy.
According to Michael Tran, managing director of global energy strategy at RBC Capital Markets: “refiners are rejecting barrels at a historic pace, and with U.S. storage levels sprinting to the brim, market forces will inflict further pain until either we hit rock bottom or COVID clears, whichever comes first, but it looks like the former.
Read more via Los Angeles Times / CNN Business
